FPA Medical Management's bankruptcy saga will drag well into this year despite the company's stated intent to emerge from Chapter 11 by the end of 1998.
A company spokeswoman blamed the delay on creditors, who asked that hearings be postponed.
The California Medical Association says FPA owes $60 million to at least 1,650 physicians and has asked the state Department of Corporations to require HMOs to pay them. The HMOs say they have already paid FPA for medical services and should not have to do so again.
CMA Chief Executive Officer Jack Lewin said settlement negotiations began last month. If they are unsuccessful, Lewin said, "the alternative is for us to launch lawsuits against the plans, which would be expensive, but we are prepared to do that."
The CMA is also preparing a lawsuit against the officers and directors of FPA for neglecting their fiduciary duty by failing to pay physicians, Lewin said.
The CMA has filed claims for $15 million against FPA on behalf of physicians and maintains that another $45 million is owed to California doctors. But Lewin acknowledged that bankruptcy court is probably the "least productive route" for recovery. Banks and other creditors have first dibs on proceeds from the sale of FPA's assets.
San Diego-based Sharp Health Plan, an HMO owned by the hospital system Sharp HealthCare, voluntarily paid $500,000 owed to FPA physicians.
The plan's chief executive, Kathlyn Mead, said the payments were made to ensure that former FPA physicians would continue serving Sharp enrollees. The plan doesn't expect to recover the money in full, Mead said, but added, "we don't consider it a bailout."
Last month marked the end of California operations for FPA, formerly in San Diego. U.S. Bankruptcy Court Judge Peter Walsh in Wilmington, Del., approved the sale of assets of Los Angeles-based Axminister Medical Group to the group's physicians for $1.35 million.
A confirmation hearing on FPA's reorganization plan is scheduled for Feb. 24.